Resale

[SteveA]

I'm doing service work for a new decorator.  She wants me to omit the sales tax and she sent me her form -
She checked the box for Tangible Personal Property.  Since I'm a vendor providing service on site shouldn't it be the other box - a Service for resale that should be selected ?    Thanks for any help
SA 

[sofadoc]

All that stuff varies so much from state to state. Hard to say.
When topics of sales tax have come up before, I've attempted to Google sales tax laws in other states, and it's always clear as muddy water.

The only form I have is a standard W-9 form. There aren't any boxes to differentiate between the types of exemptions. But as long as the decorator collects the sales tax from the end user, it doesn't seem like it would matter.

[MinUph]

Yea if it has the correct company name and correct year is all I really care about.

[brmax]

Sounds like that would totally be going through the decorator with decision using her #
Although in ours here it says to an effect your decision on trust they are doing correct.
Doesnt seem that it should matter in tangible check off, they could decide how its best line item taxed. Maybe that is their reasoning, with some pre accountant call they made.
It sure is a days work at least searching and trying to find these specfics. I think you can trust the other business pro to do the right thing, and with her name on the billing.
Thats my .02
Floyd

[65Buick]

Not sure what this tangible property thing is about but generally if you are not selling to the end user then sales tax doesn't apply.

[Mojo]

In Florida if we sell to a company then we require a state sales tax number. The same goes when we purchase something from another company. They ask for our sales tax license number.

Because we ship out of state 70 % of our orders we do not charge sales tax to those customers. But it is an accounting nightmare keeping track of everything. We have to have their address plus we need to have the UPS/Fed Ex shipment receipt showing that order went out of State.

If the sale is made in State then we charge sales tax to those customers unless they are a company with a sales tax license.

Mojo

[D3Gilmore]

Interesting thread.  I was just reading the rules in California and if I produce something from scratch, both my labor and materials are taxable.  If I "reupholster" the customer's original piece, only my materials are taxable.  So by this logic, if I leave a piece of their old batting in a cushion, then in effect, I don't have to charge sales tax as it's just my labor.

I need to definitely get it clear as I may change my invoicing to read 'reupholster' as opposed to 'fabrication of new"....

So much to learn.

[MinUph]

One thing about sales tax. If you try to "work around" collecting sales tax and the tax man comes around he "will" know what your doing and the outcome won't be pretty. They are no stupid and generally have seen it all. Your not charging sales tax your collecting it for the state.

[SteveA]

Yes the sales tax people are worse than the IRS.  There is a glass + mirror shop I deal with.  The sales tax people did a random check of her books.  They determined collections seemed out of order so they audited her for three years and every Wednesday an agent came to her shop and sat there for two hours to watch how business was handled.

You can't go to Home Depot - purchase plywood for a job and throw in two cans of paint for your Home use.  I never make out a bill without the sales tax included for collection - KEEP THE BOOKS STRAIGHT - the only way to go.
SA

[gene]

We are unpaid tax collectors.

My thought is, when in doubt, either find out for sure or error on the side of paying/collecting the sales tax.

Government spending continues to go up and taxes continue to increase. Tax collecting continues to increase. Obama added over 10,000 new IRS employees mostly to deal with small businesses and the growing cash economy.

I've read about companies who have a customer or supplier who gets audited and that company is doing something wrong so all their customers or suppliers get audited. How about you get audited and the IRS takes all the data on your Quickbooks software, including your customer list?

I put the time into trying to follow all the rules for taxes. With congress raising our debt limit the government has to get even more aggressive in collecting taxes, penalties, and interest.

gene

[sofadoc]

I've read about companies who have a customer or supplier who gets audited and that company is doing something wrong so all their customers or suppliers get audited.

It happened to me.

I did a big job for a major fast food chain. I made out a bill that included sales tax. They jerked me around for 2-3 months.

Finally, I stormed into their store one day and demanded payment. The manager said he couldn't find a copy of the invoice, so I took a blank piece of paper and made out a hand-written invoice for the total amount including tax, but I failed to list the sales tax separately.

The restaurant got audited, and when the auditor came across my invoice with no sales tax, I got audited. He showed me a copy of my hand-written invoice that triggered the audit.

As a side note......there is no labor tax in Texas. HOWEVER......refurbishing of tangible personal property is considered a "taxable service". So hence ergo, there is a labor tax (they just don't call it that).

[brmax]

I have made a copy of the form regarding tax number filing of persons wanting to use that tax deduction.

Floyd